Hiring grows in Washington, but COVID surge raises red flags

New unemployment claims in Washington dipped last week, but a recent COVID surge could bring layoffs.

By Paul Roberts / The Seattle Times

SEATTLE — New unemployment claims in Washington dipped slightly last week as a rebounding state economy continued to add more jobs.

But that encouraging news comes with a warning from the state’s economist: Thanks to surging COVID-19 cases, the state could see renewed layoffs and a slowdown in recent hiring.

“I’m not expecting a dramatic change, but one that could slow down the pace of job growth from where the state was the last two months,” said Paul Turek, state economist for the Employment Security Department.

Washingtonians filed 5,357 new, or “initial,” claims for unemployment benefits last week, a 3.1% decrease from the prior week, the ESD reported Thursday. Nationally, new claims rose 1.1% over the prior week, to 353,000, the U.S. Labor Department reported Thursday.

The state’s job market continued to recover: In July, Washington added 22,700 jobs and the unemployment rate fell to 5.1%, from 5.2% in June, the ESD reported last week. The U.S. unemployment rate for July was 5.4%.

But those encouraging trends are likely to be affected by recent increases of COVID-19 cases from the highly infectious delta variant of the coronavirus, which has already prompted new government restrictions.

Indeed, although initial claims remain dramatically lower than during the early months of the pandemic, their numbers have crept back up in recent weeks. The 4-week moving average for regular initial claims last week was 5,306, which was up nearly 4% from a week earlier and is 2.1% higher than it was at the same period in 2019, the ESD reported.

Turek said those trends might increase moderately if rising case counts result in renewed business restrictions and consumer anxieties that affect hiring. Already, some big employers have delayed plans to bring remote workers back to the office.

“This might, in turn, affect restaurants who might be relying on these workers who would go out to lunch,” Turek said. “There might be less business meetings and travel which could affect the transportation industry.”

“Consumers might also become more reluctant to travel and eat out and delay vacation plans, thereby affecting leisure and hospitality again,” Turek added

He also noted that because the July jobs report uses data from the beginning of the month, “the full impact of the variant” may not be apparent until next month.

That prospect comes as the state’s labor shortage, though perhaps not as severe as earlier this summer, also remains a concern.

The state’s leisure and hospitality sector, which has struggled for months to hire enough workers, added 11,800 jobs in July, according to ESD data.

Demand for workers remains elevated. Postings for new leisure and hospitality jobs, though down modestly from earlier this month, are again surging and were 32% higher than in January 2020, as of Aug. 20, according to data presented by Harvard University’s Economic Tracker. Overall job postings were up 16.8% in Washington.

Some employers have said the labor shortage has been exacerbated by the $300-a-week enhanced federal unemployment benefits, which expire after Labor Day.

In Washington state, the number of overall claims — new claims plus ongoing claims that people must file each week to receive benefits — dropped 3.6% to 275,558 last week.

New claims for federal pandemic extended benefits — for workers who have exhausted state unemployment benefits — climbed 25% last week from the prior week.

Last week, the ESD paid benefits on 204,343 individual claims. That’s down 3.3% from the prior week and the lowest number since April 4, 2020. Because individuals can have multiple claims, the number of claims is often slightly higher than the number of individual claimants.

Since March 2020, more than 1.1 million Washingtonians have received more than $20.9 billion in jobless benefits, with about two-thirds of the money coming from the federal government.

By comparison, in each of the previous 10 years, the ESD’s annual payout averaged just over $1 billion, the ESD said.

Talk to us

More in Herald Business Journal

David Simpson (left) and Scott Murphy.
Port of Everett candidates spar over transparency

An incumbent, David Simpson, is challenged by Everett City Councilmember Scott Murphy.

Rendering of the new terminal that Propeller Airports plans to build at Paine Field in Everett. The terminal, which will serve the general aviation community, will replace Castle & Cooke Aviation's existing building at the Snohomish County-owned airport. (Propeller Airports LLC)
Propeller Airports to acquire Castle & Cooke at Paine Field

Propeller, which owns the nearby passenger terminal, plans a new complex for private aviation.

Everett Farmer’s Market canceled Sunday due to weather

Organizers cited a high-wind advisory. It is to reopen Oct. 31 for the final market of the season.

FILE - In this May 26, 2020, file photo, a sign at the headquarters for the Washington state Employment Security Department is shown at the Capitol in Olympia, Wash. Washington state's rush to get unemployment benefits to residents who lost jobs due to the coronavirus outbreak left it vulnerable to criminals who made off with hundreds of millions of dollars in fraudulent claims. (AP Photo/Ted S. Warren, File)
Washington’s unemployment rate in September was 4.9%

Employers added 17,600 jobs last month, a 7.3% increase over August.

With the Olympic mountains in the background, the first passenger flight by Alaska Airlines Flight 2878 departs for Portland on opening day of the Paine Field Terminal on Monday, March 4, 2019 in Everett, Wash. (Andy Bronson / The Herald)
Alaska Airlines stalls plan for extra flights in Everett

Business has been sluggish, but the airline says it will offer 12 flights a day at Paine Field in the new year.

Hillside homes in Mukilteo are seen from the ferry line on Oct. 20. (Andrea Brown / The Herald)
Mukilteo asks for input on housing density, and it’s complicated

Here’s a guide to what voters should know about the advisory ballot measure. What does it actually do?

People hold signs in protest of the vaccine mandate after Boeing announced it would terminate workers who do not comply on Friday, Oct. 15, 2021 in Everett, Wa. (Olivia Vanni / The Herald)
Some Boeing workers protest in Everett over vaccine mandate

The Boeing Company announced earlier this week that its workers must be vaccinated by Dec. 8.

FILE - In this file photo dated Monday, March 11, 2019, rescuers work at the scene of an Ethiopian Airlines plane crash south of Addis Ababa, Ethiopia.  The number of deaths in major air crashes around the globe fell by more than half in 2019 according to a report released Wednesday Jan. 1, 2020, by the aviation consultancy To70, revealing the worst crash for the year was an Ethiopian Airlines Boeing 737 MAX on March 10 that lost 157 lives. (AP Photo/Mulugeta Ayene, FILE)
Former Boeing test pilot pleads not guilty in 737 Max case

He’s the first person to be charged with a crime in connection with the Indonesia and Ethiopia crashes.

FILE - In this March 14, 2019 file photo, Ethiopian relatives of crash victims mourn at the scene where the Ethiopian Airlines Boeing 737 Max 8 crashed shortly after takeoff killing all 157 on board, near Bishoftu, south-east of Addis Ababa, in Ethiopia. Relatives of some of the passengers who died in the crash will mark the two-year anniversary of the disaster on Wednesday, March 10, 2021, by seeking a reversal of government orders that let Boeing 737 Max jets fly again.  (AP Photo/Mulugeta Ayene, File)
Boeing pilot involved in Max testing is indicted in Texas

He’s accused of giving the FAA false information about systems that played a role in two deadly crashes.

Top (L-R): Kim Daughtry, Steve Ewing. Bottom (L-R): Gary Petershagen, Marcus Tageant.
Developers court Lake Stevens council incumbents with over $20K

Over half of the campaign dollars for four candidates came from people tied to real estate or property development.

Traffic drives in view of a massive Boeing Co. production plant, where images of jets decorate the hangar doors, Friday, April 23, 2021, in Everett, Wash. (AP Photo/Elaine Thompson)
Boeing says workers must get the COVID vaccine by Dec. 8

“Compliance with these requirements is a condition of employment,” says an internal company presentation.

The Boeing 737 Max 10 airplane landing at Boeing Field in Seattle on June 18. (Chona Kasinger / Bloomberg)
Boeing ramps up 737 Max but 787 deliveries are still blocked

Boeing last month maintained its steady trickle of sales as it navigates the aviation downturn.